BLOCKBUSTER STRUGGLES IN CHILE

(April 3, 2007) Blockbuster Video launched last week a variety of promotional offers to attract clients in a market greatly dominated by pirated videos. In recent years, the popularity of cheap pirate videos sold by street vendors throughout Santiago has made it extremely difficult for legit video rental companies. Blockbuster currently has 77 stores throughout Chile, but does not plan to shut down business, as they were forced to do in Peru.

According to Edward ArgUellas, general manager of Blockbuster Chile, one of the key benefits of Blockbuster is the wide variety of videos available – street vendors generally only offer have recently released popular films. Blockbuster has added a US$1 movie day, among other promotional deals.

The popularity of pirated movies in Chile continues to rise, despite efforts to curb the illegal trade. In January of this year 34 percent of Chileans said they purchased pirated movies, up 21 percent from 2004.

Chile has recently been sharply criticized by the U.S. and the E.U. for not adequately protecting intellectual property rights.

An EU study released last January identified Chile as a nation with very high levels of production and consumption of pirated goods, placing fourth behind China, Argentina, and Malaysia. The report reflects growing EU concern about Chile’s pirated goods market and the lack of governmental efforts to protect intellectual copyrights.

The E.U. report was released less than a week after the Office of the U.S. Trade Representative (USTR) announced Chile has been elevated to its “Priority Watch List” for alleged failure to comply with U.S. standards for intellectual property rights protection.

The U.S. report highlighted pirating of movies, music, and software as some of the most troubling areas of patent infringement (ST, January 16).